On the Costs of Medical
Care

The April 21-27
issue of the DBJ contains a sequence of articles on the medical care crisis in
America. So many words; not a single thought, even though the articles contain
all the information one needs to identify both the source of the problem and its
only possible solution. The articles make clear that medical insurance is so
costly that many people cannot afford it and many who can choose instead to
spend the money elsewhere, mostly because medical insurance costs have increased
73 percent in the last five years alone while inflation has increased a mere 11
percent. In addition, the articles catalog various proposals and techniques
hospitals are using to cope with the squeeze they are being crushed by because
of the care given to the vast number of uninsured or underinsured
patients.

First of all, the
various proposals and techniques hospitals are using to cope with the problem
all seem to be attempts to get more money into the system--from government at
all levels, charity, and patients. But this is disingenuous for two reasons. We
know, for one, that Americans pay more per capita for medical care than the
residents of any other nation, and some to these other nations manage to provide
comprehensive medical care to all. If other countries can do more for less, the
only logical conclusion is that there is more than enough money already in the
system. The problem isn't a lack of money, its where the money goes.
Furthermore, putting more money into the system won't provide a solution to the
problem. If the cost of medical care is rising 14 or more percent a year, any
combination of income sources that manages to pay the bill this year will be
inadequate when next years increases come due.

There is really only
one solution to the problem, but people in the medical care delivery system
won't acknowledge it or, as Mary Grealy does, only acknowledge it grudgingly.
She is quoted as having said, "How can we increase access? . . . One of the ways
we can do that is by reducing the cost." No, Mary, the only way we can do it is
by reducing the cost; it is the only way we can get everyone to carry insurance
and avoid the system failure that Dr. Ron Anderson predicts, and make the people
that Britt Berrett is concerned about who buy BMWs but not medical insurance
change their ways.

But,
unfortunately, before any meaningful proposals can be made to reduce the cost of
medical care, we really need to know where every dollar paid into the system
goes. If Americans are paying more per capita for medical care than the people
in other countries and getting less for it, we need to identify the sink holes
into which that money is flowing. Yet I suspect very strongly that every segment
of the medical care delivery system would resist revealing that information with
their utmost political might, for I suspect that each segment has its own very
special sink holes that must be kept secret to avoid the wrath of the American
people. So, perhaps, reforming the system won't happen until the system brings
down itself, which if my calculations are correct, won't take too many more
years. (Dallas Business Journal 4/23/2006)